May 15, 2008Internet Advertising Revenues Top $21 Billion In ’07, Reaching Record High

The IAB and PricewaterhouseCoopers LLP (PwC) announced that the 2007 Internet Advertising Revenue Report shows Internet advertising revenues in the U.S. continued their upward climb.

For the full year 2007, revenues totaled $21.2 billion, exceeding 2006 performance by 26 %, itself the former record year.

Q4 2007 Internet advertising revenues hit $5.9 billion, representing historic revenues for a single quarter and a 24% increase over the same period in 2006.

This is the fourth consecutive year and 13th consecutive quarter of record results.

“This achievement is a testament to the continued vitality of interactive,” said Randall Rothenberg, president and CEO of the IAB. “Explosive innovation in the industry is providing marketers with new and unique ways to reach consumers—it’s a very exciting time.”

Search, display, classifieds and lead generation all continued growing at a healthy rate, according to the report. Consumer advertisers remained the largest category of Internet advertising spending, at 55% of 2007 full-year revenues, up from 52% from the full year 2006.

“Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter. Interactive advertising is not just the future, it is the here and now, as it represents a meaningful and growing component of U.S. advertising and marketing spend,” said David Silverman, partner, Assurance, PricewaterhouseCoopers.

ADVERTISING FORMATS

2007

2006

Type of Advertising

$

% share of market

$

% share of market

Display Advertising

4,455

21%

3,685

22%

Sponsorship

636

3%

496

3%

Rich Media (06 including Broadband Video)

1,657

8%

1,192

7%

Digital Video (07 only)

324

2%

N/A

N/A

All Display

7,072

34%

5,373

32%

Keyword Search

8,805

41%

6,799

40%

Classifieds

3,321

16%

3,059

18%

E-mail

424

2%

338

2%

Lead Generation*

1,584

7%

1,310

8%

TOTALS:

21,206

100%

16,879

100%

INDUSTRY CONCENTRATION

FY 2007

FY 2006

Top 10

69% ($14,632)

69% ($11,647)

Top 25

80% ($16,965)

82% ($13,841)

Top 50

89% ($18,873)

92% ($15,529)

PRICING MODELS

FY 2007

FY 2006

CPM or Impression

45% ($9,492)

48% ($8,102)

Performance Deals

51% ($10,817)

47% ($7,933)

Hybrid

4% ($897)

5% ($844)

Conducted by the New Media Group of PricewaterhouseCoopers, the Internet Advertising Revenue Report was launched in 1996 by the IAB, and aggregates data from all companies that report meaningful online advertising revenues. The results are considered the most accurate measurement of interactive advertising revenues with the data compiled directly from information supplied by companies selling advertising on the Internet. The survey includes data concerning online advertising revenues from Web sites, commercial online services, free e-mail providers, and all other companies selling online advertising. First and third quarter revenue reports are estimates, with the actual figures being released along with second and fourth quarter data respectively. PwC does not audit the information and provides no opinion or other form of assurance with respect to the information.

The IAB sponsors the Internet Advertising Revenue Report, which is conducted independently by the New Media Group of PwC. The full report is issued twice yearly for full and half-year data, and top-line quarterly figures are issued for the first and third quarters.